Fair Debt Collection Practices Act (FDCPA)

Know your rights so you can take action against harassment from debt collectors and collection agencies.

If you are behind on payments for your credit cards, car, mortgage or student loans, you’ve probably been interrupted at some point or another by phone calls from collectors – especially following the recent economic recession. “Thirty million Americans came out of the recent financial crisis with one or more debts in collection,” estimates Richard Cordray, Director of Consumer Financial Protection Bureau (CFPB). Debt collectors make numerous pesky phone calls each day to debtors, but the Fair Debt Collection Practices Act (FDCPA) warns some of the practices that collectors use may be illegal.

The FDCPA explicitly states, “A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt or may not use any unfair or unconscionable means to collect or attempt to collect any debt.”

Creditors and collectors are bound by the guidelines set forth under the FDCPA and cannot take excessive action to collect a debt. The CFPB warns it is keeping a watchful eye on how creditors interact with consumers and outlined the following as likely grounds for legal action against perpetrators.

So, when does the FDCPA apply?

The FDCPA only applies to debts that have been sent to collections and does not apply to a creditor attempting to collect on a single late payment. Pay particular attention to this distinction. As a general rule of thumb, if you are talking to a collector, your rights are protected by the FDCPA. If you are talking to the creditor directly, it usually does not fall under the guidelines set by the FDCPA.

However, some credit card companies have their own in-house debt collections departments, so you may think you are talking to the creditor, but you’re actually talking to the collections department. Most creditors will send an account to collections after about three to six months. Always ask if this account is in collections. If so, you have more rights in controlling how and when the conversations about your debt occurs.

Collections calls are restricted under the FDCPA to any day between 8:00 AM and 9:00 PM (local time). It also limits the number of collections calls that can be made on a single debt during a single day.

As you can see, even under the strict guidelines of the FDCPA, phone calls are not prohibited altogether. Still, one of the biggest advantages of the FDCPA is that it allows you to set some ground rules for when the collector may contact you. When restricting your call hours, don’t forget to include weekends and holidays. If you’ve specified your preferred contact time and method and the collector fails to comply, you are within your rights to make a report to the FTC or Consumer Financial Protection Bureau.

You should also keep in mind that you are within your right to refuse to repay the debt, in which case the collector is prohibited from calling again, but they still have the ability to attempt to sue you. You may submit a letter stating your refusal to pay the debt within 30 days of the collectors first contact. Once they receive the letter, they cannot contact you directly again. The only action they can take is to get a court order for payment. In addition, if you obtain legal representation, the collector must send all future communication through your attorney, and not to you.

When attempting to collect a debt, collectors cannot say anything as they please. The FDCPA has set some guidelines for what the collector can say during the conversation. This helps prevent some of the less ethical collection practices you may have experienced.

The following provides a more detailed list of what a collector can’t do in their interaction with a consumer:

They cannot hold you accountable for debt you did not authorize or agree to unless the law permits it.

They cannot post your payments late and then charge late fees, or deposit postdated checks prior to the date indicated.

Collectors cannot confiscate your property without a specific court order, such as a bankruptcy decree.

They cannot disclose your debt to anyone without your consent. However, they are permitted to contact any known associates if they cannot get in contact with you to confirm your information.

Collectors cannot use abusive or profane language; or threaten violence or physical harm.

They cannot falsify the real amount that you owe, or the legal status of the debt.

Collectors cannot collect any amount greater than what is owed on the debt – i.e. they cannot add extra penalties or interest not previously outlined in your contract.

They cannot make you pay for collect calls or paid-on-delivery mail services.

Collectors cannot make false or embellished statements on your credit reports in an attempt to punish you. Credit penalties for non-payment are set and cannot be increased by the creditor.

They cannot publish your name on any kind of credit blacklist that would prevent you from qualifying for credit in the future. No such blacklists exist.

They cannot send you communication meant to embarrass you into paying your debt – i.e. an envelope with big red warnings and symbols saying you haven’t paid. Graphics on mailed envelopes are restricted to a company logo.

They cannot mislead you into believing that a communication is from an attorney or government source, or that payment or nonpayment would be sent to a credit reporting agency.

Collection harassers cannot misrepresent that your debts would be waived or forgiven if you accept a settlement offer. Threatening you with lawsuits, arrests, prosecution, or imprisonment for non-payment also warrants lawsuits and fines.

So, what do you do if you face abusive collections?

Companies that violate the FDCPA may be reported to the FTC and CFPB through their websites. You are also permitted to sue the collector in the applicable state or federal court within one year from the date of the violation. If you believe you are facing abusive collections practices, take detailed notes about your experience. Ask for names of representatives, note the date and time, and give a brief description of any behavior you consider to be in violation.

The following link will take you to read the full text of the FDCPA. To restrict calls from collectors or to prevent any further contact, you can use our Fair Debt Collection Sample Letter to help you get started.

Stop collection harassment now, it’s your right

Dealing with collectors is never easy. If you’re in a position where collector harassment is stressing you out, or if you aren’t there yet but it’s becoming increasingly difficult to pay your debt, it might be time to enlist some help.

Call Consolidated Credit to see if we can help you find a solution to your debt problems that will get the collectors off your back. Our team of certified credit counselors can help negotiate with creditors and deal with collectors on your behalf. They may also be able to reduce your total payments by 30% to 50%. To learn more call or take the first step online with a request for a Free Debt & Budget Analysis.

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